JCP now trading at its lowest point since January 1982

Options speculators are implementing a variety of strategies on J.C. Penney Company, Inc. (NYSE:JCP) today, as the stock visits territory not explored since January 1982. There is no notable news to account for the stock's 6.2% drop to its current perch of $7.38, and some are attributing the move to continued selling pressure in an established downtrend . Against this backdrop, the retailer's 30-day, at-the-money implied volatility (IV) has surged 13.1%, or 9.8 percentage points, to 84.7%.

Put volume is running at about twice the typical intraday pace, with over 118,000 contracts changing hands. By contrast, 66,000 calls have crossed the tape. Most active on the put side today is the out-of-the-money November 7 strike, where over 38,000 contracts have traded on open interest of 13,000.

According to Trade-Alert, it appears that some of this volume is being rolled down to this strike from the November 8 and 9 puts, which are now in the money and seeing their fair share of action today. In essence, this is the work of persistent bearish speculators who are targeting even more downside through the next four-plus weeks. It's notable that JCP is slated to report earnings on Nov. 19, two trading days after November options expire.

On the call side of things, the October 7.50 strike is notably active as well. More than 15,000 contracts have traded -- the majority at the ask price -- and open interest was just 254 contracts heading into today's trading. IV has spiked 28.7 percentage points at this strike, as well, so it appears as though new bullish positions are being added in the hopes of a short-term recovery.

For these aggressive speculators to turn a profit by expiration, JCP needs to rally north of $7.71 -- the strike price plus the volume-weighted average price of $0.21 -- by Friday's closing bell. If JCP remains below the strike price as the front-month options expire, the call buyers have merely risked 100% of the premium paid.